WESTERLY – The Washington Trust Bancorp Inc., parent of The Washington Trust Company, had a record net income of $8.4 million for the first quarter 2012, the company announced Monday.

The Washington Trust Bancorp reported a net income of $8.4 million, or 51 cents per diluted share, compared to fourth quarter 2011 net income of $7.8 million, or 47 cents per diluted share, and first quarter 2011 net income of $6.8 million, or 42 cents per diluted share.

The diluted earnings per share were a 9 percent increase from the previous quarter, and 21 percent higher than the same time last year.

The net interest margin increased primarily due to reductions in the cost of time deposits and borrowings.

Mortgage banking revenues – that is, the net gains on loan sales and commissions on loans originated for others - reached an all time high at $3.1 million for the quarter, a result of continued origination volume growth in residential mortgage lending offices.

The loan loss provision charged to earnings in the first quarter of 2012 was $900,000, the lowest quarterly provision since the first quarter of 2008.

Wealth management revenues were up 4 percent on a linked quarter basis. Wealth management assets amounted to $4.2 billion at March 31, 2012, the end of the first quarter.

“Washington Trust posted solid first quarter results, with net income up 24 percent over a year ago,” said Joseph J. MarcAurele, Washington Trust chairman, president and CEO, in a press release.

“We are pleased with our performance, as we’ve been able to strategically grow the Corporation, despite continued economic challenges,” he added.

Net interest income increased by 2 percent from the fourth quarter of 2011 due to the continued reduction in wholesale funding and time deposit costs.

Compared to the first quarter of 2011, net interest income rose by $2.1 million, or 10 percent, reflecting the benefit of lower funding costs as well as a 7 percent increase in average loan balances.

The net interest margin for the first quarter of 2012 was 3.27 percent, a slight improvement compared to 3.22 percent for the fourth quarter of 2011 and 3.16 percent for the first quarter of 2011.

Nonperforming assets decreased to $23.6 million, or 0.78 percent of total assets, from $24.8 million, or 0.81 percent of total assets, at the end of last quarter.

Total past due loans amounted to $21.1 million, or 0.98 percent of total loans, down by $5.2 million last quarter.

Loans classified as troubled debt restructurings totaled $14.1 million at March 31, 2012, down by $5.5 million from the previous quarter.

The loan loss provision charged to earnings amounted to $900,000 for the first quarter of 2012, down by $100,000 from the fourth quarter of 2011 and down by $600,000 from the first quarter of 2011.

Net charge-offs amounted to $657,000sand in the first quarter of 2012, as compared to $839,000in the fourth quarter of 2011 and $974,000in the first quarter of 2011.

Total loans rose by $8.2 million in the first quarter of 2012, led by a $17.2 million increase in commercial real estate loans.

The Board of Directors declared a quarterly dividend of 23 cents per share for the quarter ended March 31, 2012 .

This represented a one cent per share increase over the quarterly rate paid throughout 2011.

The dividend was paid on April 13, 2012 to shareholders of record on March 30, 2012 .

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